Happy Holidays and New Year's Challenge

First, Happy Holidays to all of you hard working people in the third sector. 2009 saw some interesting challenges to the sector and I am forseeing the following in 2010.

Based on some recent economic data I saw from the Chief Economist from the NEA (see above, although blurry), the upward climb out of this economy is going to be more difficult than imagined. What you see above is that as an economy we will not reach zero (October 2008) until 2016.

What this has done to state budgets is astronomical. States are now each month waiting for tax revenue to come in in order to pay bills and when there is a gap are doing a variety of things to meet zero, including I.O.U.'s. In looking at the blow NFF chart, you see that the larger nonprofits are the most reliant on government sources, essentially becoming a more flexible (ok, maybe not) wing of government. If the blood is cut off, these large organizations are really going to suffer, as we are just starting to see.



As we look at the smaller organizations, we are also seeing some real challenges on the horizon, mostly in terms of liquidity. The below NFF chart shows that organizations that are smaller have very little in terms of receivables coming in to help them make cash flow. The days of cash on hand is just over one month.



What does this mean? It means that this year's challenge is to actually partner and collaborate. Now, before 2010 this idea has been done to real perfection about once or twice, but no where near the level that is suggested in literature and conferences. Having looked at the financials of nearly 20 organizations this year, the proof to good partnership should be seen there.

How many mergers have we seen in NYC in the last year? How many organizations, from a percentage standpoint, are actually sharing administrative, operations and fund development staff? I suggest the number is low single digits.

If we are to see the best sector make it, we will need the current song and dance of partnership and collaboration become very real, quickly. I suggest we get a donated auditorium and bring index cards with all of our assets listed on each card. We take those assets, tape them to the walls and we start mixing and matching resources. Am I crazy? Crazy is not trying something resembling this......

The Nonprofit Consultant (Part 1)
What a Nonprofit Consultant Should Be – The Offensive Lineman Theory

When I was in sixth grade gym class, I was given a yellow mesh jersey to go over my normal jersey. This indicated that I was an offensive lineman and not one of the “sexier” positions such as running back or wide receiver. My designation as a lineman followed me all the way through college, and it is also very closely aligned to how I work as a nonprofit consultant.

If you ask moderate sports fans, they can probably name a favorite player, but they probably cannot name one offensive lineman. Linemen are not in the limelight. But, ask any football players or gridiron experts about who the most important player is on their team, and they will likely name an offensive lineman.

To parallel my professional career, I once served as an Executive Director, the equivalent of a football team’s quarterback. Both are unbelievably difficult jobs, and both carry similar benefits of being in the public arena, making speeches, accepting checks, being quoted, etc. However, while I noticed that I was able to make a great impact as an ED, I have made the most impact as a nonprofit consultant.

Sometimes I see nonprofit consultants who struggle with using their unique role within the team to help move and guide the process from the support position. Many times consultants want to move upfront and play the sexier positions to be in the limelight. The sooner a consultant can understand that he has chosen a profession in which his work will be conducted through others, then the better his work, the organization, and the sector will be. Consultants, grab your yellow mesh jersey with pride.

Crazy Uncle Syndrome – How to Confront Wacko Board Member Moments

“O.K., everyone I would like to start by holding hands and saying a prayer,” stated my board chair as we started the most important meeting of the year. We were meeting with the Senior Vice President overseeing Corporate Philanthropy at one of the largest corporations in the United States. Everyone was looking forward to it. The day before, my board chair emphatically stated, “I will meet you in front and we will walk in together.” My stomach sunk and I thought, “Crap!”

Crazy Uncle board member situations happen more regularly than you think. The term “Crazy Uncle” came from one of my clients who has had a board member act like Kanye West at an award-show on several occasions. Another client had a corporate-titan type who believed that working with philanthropy was the cross between verbal arm wrestling and Let’s Make A Deal; a funder literally ran a sprint out of the room for fear of her life. So, how we tame the Crazy Uncle board member? Especially since we may feel like he holds the Executive Director’s job in his hands. Here are some ways to work through this challenge:

• Discuss Talking Points Ahead of Time, Give Crazy Uncle a Specific Role – While this seems like a given, I am always amazed how this step is missed. Often schedules become too busy or simply you trust all of those invited to represent the organization well. This will not happen unless you go over the script the beforehand.

• Give Crazy Uncle Another Venue – Sometimes individuals think they are skilled in areas that they clearly are not. I used to think I was a great orator, like MLK-esque, until I saw a video and realized I was far from it. While I have moved onto other dreams, sometimes using the board members perceived asset could be done in another vein. Try having them speak in less pivotal situations: addressing staff at the annual meeting or speaking to clients on his passion for service.
  

• Talk To Another Board Member – I am sure that you have noticed the rubbing of the eyes and looking at the shoes of other board members when Crazy Uncle speaks. Have a board peer approach C.U. This can be a difficult conversation for them to have, but if other board members can muster up some strength, they should do it.

• Forewarn the House Guests – I think most VIPs know that board members are volunteers. A call to the VIP ahead of time to signal that Crazy Uncle is a very dedicated volunteer and is passionate about the work, but because of his military training he might just ask everyone to do 20 push ups. Ask the VIP not to hold this against C.U. (and she can ask for a rain check on the push ups); this should not diminish the important work your organization is doing.

• VIP is Sacrificial Lamb – Sometimes the Crazy Uncle has been mumbling “Oh Suzanna” at the end of the table for many years and you have just dealt with it by talking louder. Well, this is probably one of the reasons you have not been able to move forward and letting this situation become exposed can help address the issue. This may seem extreme but I have seen it work. Of course, choosing a smaller VIP to sacrifice might be preferable.

All the recommendations have one common thread and that is to plan out a response. As these situations can be embarrassing, responding in anger will only exacerbate the situation.

In the situation with my overly religious board chair, I actually re-focused the situation by stating that part of the custom of the organization was to give thanks for bringing everyone around our mission and that we were especially thankful to the funders for hosting us. I stated we looked forward to them joining us in a site visit and seeing our work. The board chair sat quietly during the meeting, and while embarrassed, she also stated that she was out of line.

Quick Time Poll - Is This a Corporate Perspective or a Nonprofit One?

Are the following are non-profit or for-profit executives? (CEO's, ED's or Presidents):

• 90% of executives say the U.S. is in poor shape
• 45% percent think the U.S. economy will recover in 2010
• 26% say cutting costs is the most important decision
• 47% say health care costs have more impact
• 50% say executive compensation plans have changed
• 65% are spending more time reporting to the board
• 41% percent plan to spend more time on customer/client relationships

Please select your answer through the poll next to this question. I will post the answer at the end of next week. If you leave a comment, you will be eligible for a prize!

Summer Lovin' - Had Me a Blast

Summer is coming to a close and if you listen closely you can hear nonprofit organizations taking a huge breath as the fall is a very busy time for the sector. What do we anticipate seeing:

• Academics will be back in the classroom and in their nooks finishing their writings for their publishers delights. I am sure more writings on how the nonprofit sector should be more like the business sector.
  
• Managers and Executive Directors will be welcoming back staff who had the summer to think about new ideas for the organization or avenues to get out.
• Foundations are preparing for the fall grant cycle and board meetings, where they will continue to pull back and make more difficult decisions.
• Government funding, especially federal, will be going to those other than ourselves, or it will seem that way.
  
• We all will be confused with nonprofit press outlets who say things are going down hill but things are looking up.

Just my sense on the above but know that September is a month that feels more like renewal than January does, so here a glass to the little break we got this summer and the intensity of the fall. Let me know how I can help!

Something To Laugh About

I was given this jokey one-pager (I am forgetting where I got it), but though it outlined various times in my working with non-profits, especially as of late, boards. Hope you find it funny as well:

"Dakota tribal wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount. However in nonprofits/business we often try other strategies with dead horses, including the following:

1. Buying a stronger whip.
2. Changing riders.
3. Saying things like, "this is the way we have ridden horse".
4. Appointing a committee to study the horse.
5. Arranging to visit another site to see how they ride horses.
6. Appointing a tiger team to revive the dead horse.
7. Creating a training session to increase the riding environment.
8. Changing the requirements to specify that "Horses shall not die".
9. Comparing the fate of horses in today's environment.
10. Hiring contractors to ride the dead horse.
11. Harnessing several dead horses together for increased speed.
12. Declaring that "No dead horse is too dead to ride".
13. Providing additional funding to increase the horses performance.
14. Doing a study to see if the horse can be ridden cheaper if outsourced.
15. Purchasing a product to revitalize the dead horse.
16. Declaring the dead horse is "better, faster and cheaper".
17. Forming a quality circle to find uses for dead horses.
18. Revisiting the performance requirements for horses.
19. Promoting the dead horse to a supervisory position.

How does this relate to your work?

My Mom Said I Was Good Lookin' So That Means I'm Good-Lookin'

This week I am performing my patriotic duty and reviewing grants for the federal government. Now, I do get paid a small sum but I view this as more a volunteer service than anything and since I have not ever been called to Jury Duty, this seems like a good way for me to serve.

As I read these applications, where hours and hours of time and energy are spent on crafting these things, I can say that there are couple of areas that jump out at me. They are as follows:

1. No matter how many grant-makers panels I moderate or attend or see speakers from the federal agencies, I am amazed at how many do not follow the directions. I always brushed this off as something they had to say but it is true, people do not follow directions. Or read.
   
2. Anyone, anywhere can set up an establishment somewhere, gain a little funding and look a certain way. Here is the formula: someone with some letters behind their name, a group that will house you but not keep tabs on you and a large title behind your establishment. I am now going to call my desk the National Center for of Wood and Steel Collaboration. Let the good times roll.
   
3. Using math to tell a story is a very hard concept for most. I have trouble with it as well Budgeting is a mathematical example of telling a story. Not just listing numbers.

The biggest thing I see is how freely the word "model" is used. It made me think of a television story I once saw where a mother said to her son, "You are good looking". The son, not really a looker but feeling confident, soon thereafter went up to a pretty girl and asked her out, which she flatly rejected and commented on his looks, for which the response from the boy was "My mother said I was good looking". (Ok, the story is about me.....). Many groups I work with in some way say either they are a model or are working on a particular problem in a very unique way. I am not sure who is giving the credentialing of models out in most of these cases, but believe the term model is given out to those most close to them, within their "family sphere". Not neccessarily pomp and circumstance in most cases. Maybe it relates to the idea that we must all be special and everyone getting a gold medal but in this activity don't we miss something? It's the standard case of Franken's Law of "Good Enough and People Like Me" . GEPLE for short.

I think when I hear the word model, I am instantly off-put by it because I think innovation often sneaks up on true innovators and those that are innovating often don't know it. often because they just by pure luck ran into it. I also wonder why isn't it OK to just do good work. We all can't tackle Mount Everest but we all can tackle the nearest hill.

What A Conference Can Do.......

When I come back from conferences, I usually have one of two feelings. The first could be that I just wasted a couple days away from my family and now I am angry because it appears that my kids don't recognize me and my dog barks at me like a stranger. Darn conference. The second feeling is one in which all of my ideas become clearer and I am somehow flying a little higher. Wow, my pants even fit a little better. I feel like the latter.

So, short post but am glad to be back from the Alliance for Nonprofit Management conference. I am more engaged in their work and also more engaged in some of mine. Those book ideas should now be more real, I hope. Look forward to next year's conference, which I am hoping they will have in NYC!

Rethinking the Way We Do Conferences - More Impact, Less Cost

I want to begin my post by saying that in all of the conferences that I attend, the Alliance conference is one of the best. This being my third one, I just enjoy the subject matter and the networking. I truly learn a great deal.

Now that said, I think the industry of conferences is a bit funny to me and I have thought this for a while. The definition I like of conference is "the act of conferring or consulting together; consultation, esp. on an important or serious matter". I think we meet the classical definition. Check.

I would add that to have a conference, the environment would need to be ideal. We could not have a conference in the middle of a tractor pull or in a nursery. But on the flip side we could not have a conference, no matter how awesome, at a ski resort in Geneva. To far removed. I think a majority of the conferences that I attend, if the above is a range, would lean toward the Geneva. They are expensive, they are far removed from the central core of what the practitioners are about. This distance can weigh negatively on the definition of conference above. Can we effectively meet the definition in an environment that is a little far removed from where we practice. Is location as much a detractor as heat or time of the year? I think so, if not more.

Alright John, nice musings but your all bun and no hot dog (been waiting to say that for some time....nice). I do have a solution. Why not pick a city and have our meetings in community settings. Could I have had a better ETM Affinity Group if I were giving it in a foundation conference room. How about our membership meeting at a community center. I heard the word social justice discussed several times....I think there would be no better way to meet the needs of those on the ground floor then to "conference" among them. I am excited about the possibility of labs that specific take us as capacity builders and apply ourselves. Can you imagine going to Kansas City, 200 conference goes, and working with 5-10 groups on specific issues and applying our "conference" work to them. Talk about experiential learning and simulation. Also, would be unprecedented.

Now lets talk about costs. Summer and Tom and others should be pumped about this idea. I cannot believe that anyone would believe that doing a conference at a Marriott would be anymore expensive then 3 days of trainings and discussions at local community spaces. And imagine the economic impact on those groups. I feel better about giving 10K to the local Boys and Girls Club than to the Hilton. Paris Hilton doesn't need our cash....

Now I know the arguments against, including that the location should match our "Sunday Best". My argument would be that the Sunday best is our actions, not the clothing. As the Alliance is seeking its new identity and the conference is that one public display of our work, how about we assign ourselves to this or other ideas that changes the dynamic and also may bring our wisdom and learning into a more suitable environment. Let me know how I can help!

Chicken Things for the Soul

In the various times I have had to eat here at the conference, there has been a good deal of chicken. Chicken appears to be a customary meal or appetizer served at conferences and this one is no exception. My sense is that they could of just cooked them outside in the 117 degree heat. Summer Spencer should check and see if we can get a discount that way as we do not need to use the stove when cooking our food. By the way, she has been awesome but every speech, side conversation and stall conversation has stated that.

I think where I have been most inspired to this point is the strength in those wanting to Alliance to be "something". Working in turnaround, I see often that there are organizations in the similar state on the lifecycle who have the feeling of packing it in. Competition is too overwhelming. Challenges having been too touch. Not here. While you can sense some frustration, it is not in the statements and feelings of those stating that there is a need for capacity builders to share and congregate in a meaningful way. This would have to be a good feeling to the organizers and day-to-day of the Alliance. As it appears I almost day-to-day, feels good to me.

So as I had my chicken this afternoon and having left the membership committee (big "Ups" to my fellow committee members), I was most satisfied as I walked back to my room and thought about the energy that was there as we headed into the workshop phase. Then I fell asleep for three hours....Not sure if it was the chicken or the two days of affinity group and membership committee that kicked my butt.....

In Palm Springs....Hanging with My Nonprofit Nerd Friends

I made it to Palm Springs through a crazy plane experience where I was running through airports and sliding under closing plane doors. But I made it. The taxi driver who got me from the the airport to the hotel I think was crazy. I am not kidding, crazy. She read every billboard and store sign coming here and then thought I was a prophet because I read them with her. No kidding.

Now I am proud to say that I have been to Palm Springs 4 times and never on vacation. I have not swung one golf club in these parts, which the grass is thankful for I am sure. 3 conferences and then I stepped in for Colin Powell to speak at a youth rally. Met Gerald Ford and was on TV. I was a complete dud at the youth rally as 3000 youth in the crowd wondered who the weird looking guy is yelling "You Can Do It" and "Follow Your Dreams". I am sure there is a now young adult looking for me to say that I am the reason he is a billionaire and he wants to give me money. Or one looking to throw things at me.

I am pumped to be here. Not because I have spent several months on two Alliance committees planning certain things and now can rejoin my family soon (if they haven't moved out). I am glad to be here for a variety of reasons but the biggest is that for a couple days I will not have to do a couple things. In the outside world, as many who are attending this conference, we are probably regarded as an expert in some discipline of the nonprofit world. In this world, we speak to and are among many different types of people. Once they learn of who we are, the common questions we may get are many, but probably the same is many respects. Here are the questions we most likely get (as interpreted in my head):

• "Oh, your into nonprofits. Can you help me raise money for the worst idea ever!"
• "Oh, I serve on a board. Is there anyway I can take over everything and kill the others?"
• "My nonprofit has like 2 days to live....can you help me?"
• "Let me tell you what we do....(200 hours later...)...."let me now tell you about our programs...."

This week I get to retreat to my nonprofit "nerd-dom" with fellow nonprofit nerds and just be. Share some war stories and steal some ideas. Look forward to it. If only we had a nerd-ish Nonprofit Olympics like in the Revenge of the Nerds movie. Anyone for a Board Governance decathalon......

Challenges with Philanthrocapitalism - Selecting the Bright, Shiny Coin

Philanthrocapitalism, a relatively recent book by Matthew Bishop and Michael Green. Philanthrocapitalists are described as the new generation of billionaires who are reshaping the way they give - it's like business. Largely trained in the corporate world, these "social investors" are using big-business-style strategies and expecting results and accountability to match. This book and another in critique by fellow Wagner-ite, Michael Edwards, who states that there is a rising social and political influence of business and wealthy individuals, an encroachment of the market into every aspect of our lives and the potential erosion of older traditions of collective action, democratic accountability, solidarity and service.

I thought of these two books as I witnessed the event at the White House last week on the creation of the Social Innovation work. I am pleased that this effort is taking place, my fear is that this office will come victim to what always happens, long-serving organizations left out in the cold to those that are relatively new. Those listed in the room were New Profit Inc, Ashoka, Echoing Green, the Skoll Foundation, Harlem Children’s Zone, Robin Hood Foundation, KIPP Schools, Bridgespan Group, City Year, Salesforce Foundation, Sea Change Capital Partners, meetup.org, Nurse Family Partnership, Atlantic Philanthropies, Edna McConnell Clark Foundation, WalMart, the Gap, the Ford Foundation and the Gates Foundation. Yes, I know that this list is selective and there were a few old-timers in the room, but the above list is what was advertised. No Red Cross. No Catholic Charities. No Lions Clubs? Yes, Lions Clubs, who give out more free glasses to the rural poor than any other organization in the United States. I guess they were not innovative enough. Look at a Lions Club 990 and you willl see an organization that uses little but gives a lot.

As you may have guessed, I have a problem with the way social innovation is being targeted. I am worried that social innovation means that you must be branded as new, rather than looking at models that have been around and are working but may are closer to a used sweater than an evening gown. In addition, it appears that all is needed to be socially innovative is to have some wealth behind you but not much else. Many of these models, while touting "business principles" have no more data to show effectiveness than many of our long-timers. In this Baby Boom era, we should pay attention to their creations, they have gotten us this far.

The X Factor: Remembering and Understanding the Sacrifice During These Times

I recently read a couple articles outlining the challenges of working in the nonprofit field. One article about arts organizations, Adam Thurman, states "You deserve to work at an organization that produces great art, treats people with respect and pays fairly. No matter how much people may tell you otherwise those three goals are NOT mutual exclusive." Another article, by Rosetta Thurman, according to blogger Kate Barr, states "Rosetta Thurman confronts the self-induced damage of low wages, chip on the shoulders image of many nonprofit employees." Finally, Kate begins her blog by stating that "I am completely convinced that leadership will be the only determining factor for the survival and success of nonprofits throughout this recession". I would agree with Kate, but I think the X Factor is something that many have always had in this business but is often forgot. It was initial spark and driving energy that fueled our work early in our careers. This is what is most often missing in organizations.

Case in point. I visit a lot of board meetings. I actually enjoy it. My wife and kids recently went to the beach and I had to stay back a couple days. On one of the evenings I attended a board meeting for a large group working on behalf of family poverty. I looked forward to it (we can talk later about whether I need counseling or not). The meeting was 3 hours and not once did I hear an inkling of what the organization was about or why anyone cared about it. Contrast that to a meeting I attended at NYU, where I am a professor. I was asked to attend a meeting of students who had formed an effort on behalf of the non-profit sector. I heard the mission in almost every statement made. Can you tell me which meeting was more focused and effective. The students, of course.

What was missing in the earlier group. These individuals, all very highly accomplished professionally, had been mired in the stink of organizational process and they had developed this way for sometime, almost developing a muscle for working on small fires than working on behalf of the mission. When I weighed in on what their central purpose was and how did they think their efforts were going to have an impact on their community in 5-10 years, they became recharged. It was if I awoke a sleeping giant.

To my original point, we must remember why we got into this business. When I was 16 and helped organize and lead a march in my community around crime or work on behalf of the NAACP on racial issues, mission came way before income. When we start talking about the sector as if it is a company with the same end of the day issues, I think we lose the power of the sector. I am not saying the fair pay and these areas are not important, but they should not be the dominating factor. The idea is to not "just be leaders" but to summon that spark that got us here in the first place and let that be our compass.

Nonprofit Economic News Can Be Confusing

Lately the news we are seeing on how the economy is impacting the sector can be confusing. My advise is that executive leaders need to examine information given by the various writers of the nonprofit sector. Check out the screen below from the nonprofit Reddit site:

Quick Post: Cool Article

Friend and great consultant, John Corwin, has posted an article about his findings in the Interim Executive Director field. Here is the link:

http://www.corwinconsulting.com/images/leadershiptransition.pdf

Happy reading.....

The Safety School Notion

I am a little steamed and it is a common subject that is getting my blood boiling. It seems like an everyday occurrence that I see an article the discusses the move for for-profit professionals into the nonprofit world. Now, I am in favor on corporate-nonprofit partnerships, in fact I train on it and have developed models for it that are in place in various communities around the United States.

My blood pressure is high because at where the articles state the executives are looking to be placed. I do not believe a for-profit executive equals a nonprofit executive, or even worse and where many of the articles suggest, a for-profit executive equals more than a nonprofit executive and therefore the nonprofit should be so lucky. Both ideas are severely flawed, although I am in favor of the movement for those to learn about the DNA of nonprofit organizations.

The assumptions that get my hairs crossed are:

• The notion that anyone with five years experience and an MBA can run a nonprofit. I have been in this work for over 20 years and believe me I need all of that experience to do what I do. This insults our sector.
  
• That 3-6 month crash training will amply get someone up to speed on becoming a nonprofit executive. Yes, understanding the flow of programs that serve our most at-risk populations only requires this amount of time. This is also an insult.
• The "social entrepreneurship" movement often pushes the idea of a young-MBA type coming in an starting a new program that will replace the old, tired work of those who worked on the issue before. I see more innovation in the work of these everyday heroes than I have seen by these TIME magazine individuals everyday. In fact, these individuals are the webbing that is saving this country during these hard times.
• Foundations and funders are often often so swayed by the jargon of these groups and individuals that the older groups lose out without much inspection other than the words "new" and creative strategies to create buzz.
• The same individuals who may have occupied the board rooms of nonprofits and have led many of these nonprofits down terrible paths are now the same hiring pools that are being drawn upon to hire for these nonprofits. I have the first question of an interview: "tell me your experiences on a board and ....(Question 2,3,4)....This should be a good FIRST start.
  

In all of this I feel like the non-profit sector is being reserved as the "Safety School" for those who have been so lucky to be in the other sectors, while it is those in the other sectors who have done so much damage. If they have respect for the sector, let them work from the ground up. When they get to the top, they will better for it and so will the organization.

Susan Boyle Nonprofits

The Susan Boyle phenomenon has been interesting. Here is someone who some have described as an individual who is not what one reporter called "magazine cover" material getting her chance and really shining. Now I am not sure who is magazine cover material or that we should be a world that titles people in such a way, but I do know that Susan Boyle is a great singer and when she was able to showcase her talent, she did so admirably. I also respect that she fought off the ridiculous requests for her to get a make-over, stating she was happy how she looked.

Now, I can't help it but I frequently find how popular media stories like this are equal to the nonprofit world and I see one glaring me in the face. It relates to the work to obtain funder relationships. I often see the work to woo funders similiar to American Idol or other reality show based on pomp and circumstance. Groups with glitz and buzz are often over resourced while the organizations with talent but not as flashy, the Susan Boyle Nonprofits (SBNP), are often overlooked. When the SBNP's get their chance, they almost surely shine. Also, they are often asked to become glitzy once they are revealed. Most have trouble doing what Susan Boyle did and turning this request down. They almost always take the money and the growth.

A friend told me of a glitzy and over-resourced organization that is much pomp and circumstance that has recently lost some funding. Some funders have teamed together to make sure this group had money while many Susan Boyle-like groups nearby continued to struggle to get their chance.

As I think of this, I have a big worry about Susan Boyle and the situation I listed above. I worry that Susan Boyle gets an agent, gets big and loses the "thing" that made her great. I also worry about this with nonprofits in a similar stage. SBNPs often want the agent and the fame but yet in the end lose their voice. Funders often become the agent to Susan Boyle Nonprofits and then when the voice is gone, so are they.

Let's hope Susan Boyle stays the way she is, a beautiful person with a beautiful voice. Fine just the way she is.

In Nonprofit We Trust

I thought an interesting read this week was the paper by the Center on Philanthropy at Indiana University and School of Public and Environmental Affairs entitled, "Are Nonprofits Trustworthy". Find here: (http://www.indiana.edu/~nonprof/results/trustsurvey/trustsurvey2008.pdf) The study basically states that between the three levels of government, business and the non-profit sector, non-profits are the most trusted of the sectors. Nothing new to my colleagues and would have loved to see if the field work for the data would of been done during the AIG mess.

I know my fellow practitioners are so tired of confronting the question of nonprofit trust, as they spend hours and money completing the endless grant reports and organizational performance evaluations needed to show how well they are spending a dollar. The answer from them on whether nonprofits are trustworthy, after the eye-rolling, is almost always a "Yes".

I would say that in regard to trust, nonprofit organizations are the safest bet in the trust realm. Sure, you have heard of stories of ministries gone awry or a nonprofit executive mishandling resources. I once saw an nonprofit leader try to justify to me the need to have his dry cleaning paid as part of a homeless services grant. He stated, "I must project an image that the homeless will aspire to". I told him the homeless did not crave heavily starched, cuff linked shirts.

But this is nothing in comparison to the highlighted stories we have seen from the business and government sector in recent months. With that, here are four reasons why the nonprofit sector is a more trustworthy partner than the other sectors:

1. Try following your money through each of the sector's financial systems. For government and business, it literally cannot be done. Pay your taxes on April 15th and then call the IRS on the 30th and ask where your money went, they will have no idea. Paying for a Sponge-Bob night light, try following the purchase all the way to the hands of the Sponge Bob headquarters. Might be fun to do, but won't happen. In the nonprofit world, this is much easier. Donate to the community garden, in many cases you can follow your check all the way to the balance sheet.
   
2. When a nonprofit has a financial impropriety, the sum is almost always lower than the monthly scandal on the government or business side. This is not because the sector is not big, it is because the control systems, like governance, put in place may prevent. There would be no way for an AIG mess in the nonprofit world, mainly due to size. The Aramony scandal in DC, notably one of the largest scandals in the nonprofit world was about $1.2 million dollars, a fraction of a penny compared to the scandals we see today.
   
3. The impetus for belonging to the sector is driven by a different creed. A major factor in business, outside of innovation or belief in the product, is to make money. In government, there is a feeling of altruism that is attached, but can often quickly lost when the individual cannot find there way back to their cubicle due to the size of the agency or government effort. In a non-profit, even big ones, you did not arrive with the notion of making a fortune and you can often feel the vibration of subtle change as it happens.
4. There is competition attached to the reporting structure of nonprofits. While there could be an argument that this happens in business, no business really loses that much if there are overhead irregularities in their annual report. I placed the purchase of a pencil in the travel line, oh well. And tell me the last time you read the federal budget. (I did, it is a bear!). If misreporting happens in the nonprofit world, a grant or contract would probably be in serious jeopardy. This is why the nonprofit practitioner spends so much time on reports, because they mean something.

The above outlines the position that nonprofits are in and why they must and do act in a different way than the government and business sector. The recent exposed looseness in the government and business sector has a direct relation to the trust statistics seen in the above report and it is nice to see the nonprofit sector coming out on top for once, its rightful place.

Folding Tables Should Be The Table of Choice!

I was sitting in my car today and listening to Bloomberg News talk about the AIG mess, the $10 million dollar office upgrade and the CNBC statement that executives making under $250K cannot run a Wall Street firm. It is easy to see the populist sentiment that would erupt from this and I am working hard at staying away from AM talk dial to avoid my blood pressure from rising.

The one statement I thought it was interesting in all the "hub-bub" was some animated pundit in support of the business office upgrade stated, "What are they supposed to do, sit at folding tables?!!!!". This immediately made me think of all the clients I have or the site visits I have done where the table of choice for the organization is a folding table. Let's call these organizations, "Folding Table" organizations.

I think corporate groups like AIG and others could really learn a great deal from "Folding Table Organizations, (FTO's if we need another acronymm). FTO's could impart the following:

• FTO's really make a dollar out of 15 cents. These groups, in many instances, have helped stave off and improve conditions in our most distressed communities. I think corporate CFO's should shadow FTO financial people for a day. I am sure they would learn a great deal about how to use resources.
• FTO's are often the best are forming real win-win partnerships on a shoe string. For all we hear from foundations on how CBOs should partner more effectively, which is a goal that should always be perfected, follow a participant from a social service agency for a day. See how one participant will receive ESL classes one hour from one organization, a job counseling session from another organization the next hour and a physical check-up by a health clinic in hour three. This is through great partnerships and is often brushed off or not talked of.
• FTO's could teach corporate america on a variety of subjects including diversity, organizational loyalty and non-financial reward best practices. Spend a day observing an FTO from a human resource perspective and you will quickly realize that the level in which groups are able to acheive in motivating their employees, many long-serving and from many different areas, to reach their difficult missions.

Now I am not suggesting that FTOs do not have their troubles, as they do and they are often immense. But, I do think that the often loud notion that FTO's should feel lucky to be in the presence of corporate america is flawed. It should be a reversed belief as I think the AIGs of the world could certainly learn from FTOs.

Riding Out The Storm

This article entitled "Riding Out The Storm" is from my good friend, Pat Nichols, a transition management consultant in the Washington D.C. area.

"Many organizations around the world, for-profit and non, will not survive the current economic storm. Some of those that do not will be of substantial size and repute. Many will be doing good work. All will employ good people whose lives will be painfully disrupted.

Some will die because decisions already made left them too vulnerable to survive, no matter what their leaders do in response to the crisis (Countrywide Financial and some of the nonprofits who invested with Bernard Madoff are examples). More, however, will have some chance of survival and that survival will rest upon the wit and wisdom of their leadership.

Having led or advised nearly 20 organizations through major, often life threatening transitions, I would like to offer four observations on the kind of “transition leadership” that might help other organizations survive. (I will discuss two here and two in a subsequent memo.) These thoughts, I suspect, transcend the sectors, though they will require adaptations to each.

Put the mission first: First, transition leadership requires that we put the mission first, always first, building a renewed sense of teamwork around the values it implies. People live and work, in large part, for meaning and for values; they work to add significance to their lives. Some, sadly, find that significance largely from the status that money brings and the adornments it can provide. Most, I am convinced, do not; or would not if their leaders were offering a sufficient opportunity to find broader social or spiritual value in their work.

Creating such meaning is, on the surface, easier for a civic sector and government organizations, to which people are drawn explicitly by mission. However, I would predict that for-profits that engender a sense of mission (I think immediately of Southwest Airlines and Apple Computer) will perform better, on average, than their more mercenary competitors.

One challenge for nonprofits, on the other hand, is remembering that, when tough choices must be made, mission should triumph even over loyalty to colleagues. People work to serve the mission, not to have the mission serve them; so the organization must sometimes face the severing of important, and personal, ties in order to advance that mission.

Character and integrity: Second, we commit ourselves to the highest standards of character and integrity, listening to and valuing diverse perspectives and talents. Some of these standards will vary with the values of the organization. (Teach for America or a biotech company will value experimentation and risk taking more than a hospital or an accounting firm). Some, though, will have broad application in a crisis. For instance:

· Be transparent and engage everyone—Crises are inherently unsettling. Leadership cannot guarantee an outcome. What we can do is ensure that information and participation are widely shared.

· Move quickly but systematically—In the absence of a known destination there is comfort in knowing how we will chart it and that no time is being wasted.

· Be hopeful in style and rigorous in analysis—This is a very difficult balance to strike. As leaders we must both set a hopeful tone and acknowledge, to others, and ourselves the magnitude of the challenge. To do otherwise undermines our credibility at the time we need it most.

· Live with ambiguity, acknowledge uncertainty—The need to acknowledge uncertainty doesn’t end with the description of the situation, it extends to the limitations of the choices we make. In crises, especially, we will be acting on incomplete and imperfect information. We will make assumptions and decisions that will prove mistaken. Acknowledging this is crucial not only to our credibility but to our ability to see our mistakes and adjust our course.

· Let it hurt; salve the hurt of others—As leaders in a crisis we must make decisions that are painful to us and to our colleagues. Those decisions should be painful to us. It is a mark of our caring about our colleagues. We must focus our attention on making and explaining them in ways that are sensitive and responsible.

The other two elements of transition leadership are that the organization should move forcefully and, at the same time, experimentally and that we share and celebrate success. I will soon send a second dispatch offering further thoughts on these elements.

In the meantime, best wishes to your organization in remaining sea worthy. "

Well said, Pat!

Trickle Up Leadership

This past Sunday was an article about the challenges seen at Sony Music relating to the leadership of Rick Rubin. Mr. Rubin (pictured above) is a great music producer and the thought was that he would be able to bring his success to a role as President/CEO. According to the article, it has not quite worked that way.

I equate this similarly to what happens in non-profit organizations, where an executive may leave and a program director is hired to fill the role. More often than not, the organization and the program director (sometimes) realize that specific management skills are needed that are not present in the program director.

Why do organizations do this? Most of the time it is either out of a sense of loyalty to the program person, who may have been there a great number of years as the #2 or #3. Sometimes it is laziness as going through a search can feel like it will be cumbersome. Overall, it reflects a disturbing view of executive management as believing that these skills are those that can be learned immediately on-the job, which sometimes happen.

The motto is that one position does not mean or equal future success as another. This is also true for those in the corporate community transferring to the nonprofit world. Best way to get there is further education and shadowing before stepping into the role.

Stimulus: Like a Vitamin or A Red Bull for Nonprofits

This week I read the 756-page stimulus bill. Front to back. I would say not the easiest read, but a client needed me to do it. When I was finished reading it, one of the questions I asked myself is one that I believe is being asked by political pundits from both sides, is whether this is a long-term or a short term fix for the economy. I immediately, with my non-profit goggles on, asked whether this would have a vitamin (long-term) or a Red Bull (short-term) effect on non-profit organizations. My thoughts are that I think it will be more vitamin that Red Bull.

Aside from the trickle down of Obama signing, to states receiving, issuing RFPs, reviewing and awarding and organizations receiving funds (mostly for education and labor) and organizations receiving and then spending will take quite sometime. But aside from that, may of the provisions are talking about creating long-term solutions. For instance, the Innovation Fund, which is aimed at awarding high-impact government-nonprofit collaborations around education. While the immediate impact will be funding to these organizations, the real impact is how this scale up model will have an impact on less-successful models. Some financial impacts may look like Red Bull, but really its a Vitamin approach.

Now the question that everyone is also asking is do we need a vitamin or a Red Bull. I am not a trained-economist, so not so sure but think I can agree that there is nothing wrong with taking your vitamins, might be something wrong with having another Red Bull.

Inauguration Blues

I am not going to add another motivating Inauguration paper on the inspiration of the moment. It was awesome. I was inspired. Done.

One of my lasting memories actually occurred in the morning as I tried to get to the national mall. I woke up in the morning at 4 and was on a bus by 5. The bus took me to the DC Metro and got on at around 5:30, ready to meet my group of friends by 7:30. I had a seat and was on my way. Ding Dong, stated the loud speaker, someone had become ill and we all had to get off the train. I got off to a full platform of people waiting to get on the train. Was told that my group, actual people who were on the train could go across the platform and an empty train would be coming shortly. Ah, what a system. My only worry was hoping that I got a seat on the new train.

It went horribly wrong and a voice inside my head new that it was a bad idea to get off the train in the first place. The announcer stated that those on the platform could board the train and so our old seats now belonged to someone else. Then the train came, except it was not for us, it was going the opposite way. We had to go back over and join the ranks already on the platform to get on already crowded trains. I was on the platform for another hour and the rest was as bad as the photo above.

As it relates to this blog, what rule I was reminded of was that the voice on the loud speaker was regarded as an authority and the authority was horribly wrong. As it relates to management, an even the new president, it is not a bad idea to question the voice on the loud speaker. Management and the loud speaker deserve as much.....

Back from Africa

I am back from my trip to Kenya and one of my tasks was to keep an eye out for signs of capacity building and technical assistance relating to management and leadership. The quick answer is that I saw none, although I really asked around.

The greatest example was when the Ministry of Health was giving me a tour of a facility. They were very adamant about showing me the new printing press that they have received, replacing the old one from 1978, which was discarded. They had a room full of poster paper ready to print and so I asked when all of this was going forward, they stated that the operator was not educated in the new printing press operations and the closest place to be trained on it was in Denmark. They were working out how to get him to the training in the next millennium. The new printing press was an item that was really fancied by a senior manager and purchased at the end of the fiscal year with dollars needing to be used.

They all acknowledged that decisions like this were common and so I asked the obvious question: "Is there management training or coaching for your leaders". The response from a woman in the back was, "No but they are good and coaching and training us." She got an evil eye from a couple of her co-workers.

Some parallels to our work in the USA but it was apparent that in the area where I was, executive leadership needed some coaching and the idea of coaching them was foreign. So was I.

Capacity Building in Africa

Short Post as I head into some travel.....

I am off to Kenya and have a two hour delay in the airport. I think one of the things I will try to pay attention to when I visit a couple of NGO groups is their focus on organizational development and capacity building, outside of fund development. Will keep you posted....

Also, I am stopping by a cafe for social innovators in London. I hope it is everything I envision in my head, with people sitting around and focusing on ideas for bettering the world and drinking drinks entitled, "Leverage Latte"....

Pay Attention to Bill Blass...Not Me

First, I hope that everyone had a great holiday season and that the New Year is finding you favorably. If you are like me, I think the New Year is finding you busier than ever.

I know this has been a constant rant for me but I am sorry, please allow me to start the year on my soap box. As I left for my X-Mas in San Diego I retired to small corner of the house, away from the craziness of wrapping paper and was reading the New York Times. This Sunday edition had two articles that I think are worth mentioning together. The first one, again outlined the need for nonprofits to borrow techniques and ideas from the for-profit community. It was pretty standard jargon of how the business community is all-knowing and the nonprofit community is walking around scraping its knuckles on the ground.

In the same newspaper, in a Business Section filled with stories of bad business decisions, was the story of the demise of Bill Blass clothing line. In a nut shell, it basically folded after the clothing house failed to do proper transition management, going from CEO to CEO until ultimately the organization finds itself past the point of no return. The cae, as written by the Times, shows how Transition Management was inproperly done. I am excited to use this as a case study....

As with the Harvard example written about earlier, I think it is about time for leaders to sit down from each side and discuss management...maybe someone will learn something. Now I have to look for the discount rack for a Bill Blass shirt.